Federal Reserve Board policies during the next few months will determine whether the economy plunges into recession late this year or the economic decline is postponed until 1980 or even 1981, according to top analysts at Citibank. Leif Olsen, chief economist for New York's biggest bank, said the likelihood is that the Fed, with the encouragement of the administration, will tighten the monetary screws further in an attempt to fight inflation. In that case, the nation probably will move into a recession by the final three months of the year, Olsen said.

Federal Reserve Board Chairman G. William Miller has promised that the nation's central bank will continue its tight-money policy, and Alfred Kahn, the president's top inflation-fighter, said Wednesday here that another round of monetary restraint may be needed.

The Fed tries to restrain inflation by raising interest rates to slow the growth of the money supply and make it more expensive for business and consumers to borrow.

Since last November, the Fed has been engaged in a very restrictive monetary policy, and the growth of the money supply has halted.

But in part because there is a lag between the time the Fed makes a tightening move and its impact is felt in the economy, inflation has soared in the early months of the year to a pace above 10 percent.

If the Fed tighters monetary policy even more this spring, the nation will move into an economic decline during 1979 and 1980 that will not be as severe as the steep recession of 1974 and 1975, Citibank said.

Nevertheless, the unemployment rate, which is about 5.8 percent now, will climb above 8 percent by the end of 1980 and come down slowly during 1981 and 1982, Citibank analysts said.

During the 1974-75 recession, the unemployment rate reached the 9 percent level.

Short-term interest rates, which are hovering in the 10 percent to 10.5 percent range now, can be expected to go as high as 11 percent or 12 percent before this year is out.

If Citibank forecasters are right, then the prime lending rate, which stands at 113/4 percent today, easily will surpass the 12 percent record it reached in 1974.

If the Fed waits until the summer to restrict money growth further, the recession might not occur until 1980, Citicorp analysts said, adding that the Fed may back off if it thinks its policies are causing the economy to contract. Then the recession might not occur until 1981.

"But we regard all these possibilities as less likely than a recession starting in the latter part of 1979," the bank said in its forecast.

Citibank, however, sees little long-term improvement in prices.

Although the inflation rate will drop from its current 10 percent range to 6 percent in 1981-in large part because of the recession-prices will be climbing by 8 percent or more by 1984, the analysts predict.

If there is one bright spot in Citibank's forecast for the next five years, it is that the U.S. balance of trade deficit will continue to narrow, mainly because the recession here will reduce demand for imports, while the nation's major trading partners will not see their demand for U.S. products slip as much.